All Forum Posts by: Mike Paolucci

Hi @Ola Inyang. Glad to see another Bay Area investor looking into investing! I'm originally from San Francisco and started off as an out of state investor back in 2021 with a single family home. I chose Columbus, OH due to the lower entry costs, cashflow and appreciation and have been pretty happy with my decision so far. 

Depending on your investing goals. I'd recommend doing some research into the markets. Dayton & Cleveland are also great options for cashflow and Cincy is another great market to research. 

#1 Figure out your investing goals and what you're looking for out of your portfolio (cashflow vs. appreciation vs. combination of the two). 
#2 Research the various markets you're looking into (population / job / economic growth currently going on in those markets) and then make your selection. 
#3 Start working with an investor focused lender / realtor / property manager and get good at analyzing numbers.
#4 Once you're comfortable with everything and you find a deal you like, pull the trigger. Don't get stuck in analysis paralysis.

Happy to answer any questions & share some experiences as an out of state investor. 

Quote from @Payvand Milani:

Hi all - I'm married with one child so far, in my mid-30s. I'm an outpatient internal medicine physician here in the Bay Area. For the next 3-5 years, single income household here (wife staying home with kid(s)). Very new to real estate investing. Have participated (currently still involved in them) in two real estate syndications.

I'm originally from San Francisco and ran into that same issue back in 2021. Happy to connect and share some experiences and tips I've learned since starting off as an out of state investor. 

Quote from @Nakul Patel:

Hello All,

Excited to be here. Looking for guidance on buying our first investment property in Southern California or in Ohio (around Columbus)  to start off with . 

Should we buy and market for S8 tenant or without ? Pro and/or Cons to consider ? 

Is it required to put down 15-25% down payment for investment homes ? 

Any other guidance and/tips will be greatly appreciated ! 

 Hi @Nakul Patel. I'm originally from San Francisco CA (started off as an out of state investor in 2021) and have no desire to become a landlord in CA. Here's why (coming up on the November ballot for CA)--> "Justice for Renters Act"

I'm a fan of Section 8 and have couple section 8 rentals. 

Pros
- Guaranteed money from the govt that you won't have to chase down your renters for. 
- Tenants are incentivized to not damage the property (can lose their voucher if they are found liable)
- In my experience, tenants tend to stay for longer periods of time rather than non-section 8 tenants

Cons
- The unit is required to meet a certain standard and pass an inspection prior to tenant occupying the unit 
- Tenants tend to have a lower credit score than most landlords were prefer 

Happy to connect and share my experiences as an out of state investor and share some additional tips. 

Quote from @Stephen Branagan:

Hi,

When considering investing out of state, is it best practice to find a local lender in the market I want to invest in? Alternatively, can I get pre-approved online or with my bank and go from there before shopping between lenders? 

Thanks! 

I agree with everything previously mentioned. Local lenders will have an advantage over non-local lenders but I would also recommend interviewing multiple and going with the one you click with the best. It's a long term relationship that you'll want to build so might as well do go with someone you enjoy working with right from the jump. 

I also started off as an out of state investor in 2021 so I'd be happy to connect and share some of my experiences / tips I learned along the way. 

Good luck with your investing journey. 

If you can find a local multifamily to house hack with FHA loan, do it.

I would also keep the current property you have an maybe look into how you can utilize your equity (HELOC-make sure you connect with a lender about what this will look like for you) to buy additional properties.

I would avoid CA personally. I'm originally from San Francisco and agree with what @Brandon Croucier said about the direction the state is headed in. Here's an example of what I'm talking about coming up on the November Ballot --> "Justice for Renters Act". If you can find something to house hack then do it, just make sure you're aware of what the state is trying to do moving forward when it comes to being a landlord. 

As for properties in NC, it's up to you whether or not you want to visit. Majority of my clients haven't had to fly out to take a look at the properties they purchased. With the right teams in place - investor focused realtor / inspector / PM / Lender - you should be able to get a good idea of the quality of investment it will be. 

With that being said, if you think it's more beneficial to take a look at the neighborhoods for yourself, then it might be worth the trip. Kind of a personal preference imo. 

Quote from @Julie Philpott:

Quote from @Mike Paolucci:

Window units are very common in Columbus. I own several rentals in Linden with a mixture of AC installed vs not installed. Also, tenants will often times already have their own washer & dryer units and would rather use those instead of owner supplied W&D. 

Example:

1 -Single family - central air already installed when I purchased & I provided washer & dryer units. 

2- Duplex - no central air installed and washer & dryer units are provided by the tenants. I've kicked around installing AC but still manage to get renters applying to live there before I pull the trigger on installing AC. 

3 - 2nd Duplex - I installed central air after purchasing the property for inherited tenants but they've used their own W&D units for years.

Yes, it makes it more appealing to tenants searching for a place to stay, but you can always add AC / used washer & dryer units later on in order to make the unit more appealing. 

At the end of the day, I'd say it's more of a personal preference. They can also be another item that will need maintenance / replacements if they break down. 

Thanks so much for the input. Yes I do think this as personal preference now

 You're welcome. Feel free to reach out with any additional questions. 

Window units are very common in Columbus. I own several rentals in Linden with a mixture of AC installed vs not installed. Also, tenants will often times already have their own washer & dryer units and would rather use those instead of owner supplied W&D. 

Example:

1 -Single family - central air already installed when I purchased & I provided washer & dryer units. 

2- Duplex - no central air installed and washer & dryer units are provided by the tenants. I've kicked around installing AC but still manage to get renters applying to live there before I pull the trigger on installing AC. 

3 - 2nd Duplex - I installed central air after purchasing the property for inherited tenants but they've used their own W&D units for years.

Yes, it makes it more appealing to tenants searching for a place to stay, but you can always add AC / used washer & dryer units later on in order to make the unit more appealing. 

At the end of the day, I'd say it's more of a personal preference. They can also be another item that will need maintenance / replacements if they break down. 

Welcome to BP Joseph. I started off as an out of state investor as well. Happy to connect and share some experiences. 

Good luck with your journey 

Quote from @Ashley Gilbert:

Hi everyone! I'm so excited to be here. I was introduced to the BP podcast by a real estate agent in my Chamber of Commerce and I'm so happy she led me here. I'm giving myself a year to learn all I can and save up a down payment for my first long-term rental in my local area. Have a fabulous Labor Day! 

Welcome to BP! Congrats on taking your first steps in REI. Make sure you also attend some local investing meetups. Those are great places to network and learn from seasoned investors as well.

Good luck with your investing journey.